Cooper

Norman Cooper, on behalf of a class of shareholders, appeals the district court’s dismissal with prejudice of his second amended class action complaint, alleging securities law violations against Merisel, Inc., various Meri-sel officers and directors, and its accountants and underwriters. We reverse and remand.

FACTS

Merisel, Inc. is the largest American publicly held wholesale distributor of computer hardware, software, and services. Merisel buys computer products in volume from manufacturers and then ships smaller quantities to mail-order houses, computer stores, and other resellers. In September 1993, Merisel announced that it would acquire the franchise operations of Computerland Corporation, which had numerous retail outlets. The acquisition gave Merisel the right to distribute IBM, Hewlett-Packard, Compaq, and Apple computers.

Merisel announced the Computerland purchase on February 1,1994. On February 27, Merisel announced good year-end results from 1993, and stock analysts issued favorable' reports on the company’s prospects. Merisel’s stock rose from $14 1/2 in late 1993 to a record high of $22 1/2 on March 24,1994.

On March 25, 1994, Merisel announced that it had…